TURNERS FALLS — Southworth’s bankruptcy case has been dismissed by U.S. Bankruptcy Judge Elizabeth D. Katz after the company claimed that it can no longer pay operating expenses for its Turners Falls mill and that it is unable to pay its debts.
The company filed the motion in Springfield federal court to dismiss its Chapter 11 bankruptcy case April 2, claiming it “has insufficient funds to satisfy ongoing operating expenses” and that it cannot pay the debts it owes. The cost per month to fund utilities, payroll, insurance, and other operating expenses is currently more than $100,000 a month.
According to a court representative, the dismissal does mean the case is closed, however.
As of April 9, Southworth owes the town of Montague $322,309 in real estate taxes, sewer uses, liens from the Turners Falls Fire Department, and more.
Overall, Southworth owes approximately $2,190,000 in liens that continue to accrue, according to an April 4 court document.
Selectboard members met in an executive session Monday to discuss the “next steps” in the process. After the closed-door meeting, the board had nothing new to report. Meeting minutes from the session are not yet available but the town plans to have further discussion about the matter.
Southworth’s troubles began last August when it shut down the Turners Falls plant, saying that it could no longer receive financing. The company had 120 employees throughout Turners Falls, Agawam, and Seattle. About 60 employees worked in Turners Falls and were all laid off immediately after the decision to close.
SBD Greentech, a Maine-based company, had plans to buy the plant for $4 million in December 2017 but backed out in mid-January. The sale would have included the building along with equipment and the federal license to generate hydropower at the site.
After the sale fell through, Southworth disclosed plans to sell the plant by auction. The auction was originally planned for March, but court documents state that it will not happen until late April or May.
Reach Christie
Wisniewski at:
cwisniewski@recorder.com
or 413-772-0261, ext. 280